Source: Wall Street News
Author: He Hao
Goldman Sachs strategist David Kostin's team sharply raised the S&P 500 forecast for the end of this year to 5,600 points on Friday, citing downward revisions of earnings below average and their current belief that higher price-earnings ratio multiples are reasonable. Goldman Sachs announced its initial S&P 500 target points for this year in November last year. Its latest target of 5,600 points has been raised for the third time since the initial target was announced.
Goldman Sachs strategist David Kostin's team raised the S&P 500 forecast for the end of this year from 5,200 points to 5,600 points. The target price increase was 7.7%. The reason was that earnings were revised downward below average, and they now believe that a higher price-earnings ratio is reasonable.
In a report to clients on Friday, Kostin et al said:
Our 2024 and 2025 earnings estimates remain the same, but the impressive earnings growth of the five major tech companies offset a typical pattern of negative revisions to earnings per share expectations.
Goldman Sachs strategists raised the reasonable price-earnings ratio of the S&P 500 index from 19.5 to 20.4.
Goldman Sachs's latest forecast for the S&P 500 is 3.1% higher than the index's closing price on Friday, which means there is likely room for a slight increase.
The increase comes a month after Kostin reaffirmed the S&P 500 target point of 5,200 points. At the time, he said that by the end of December this year, there was no room for further growth in the US stock market. During this period, the US released cooling CPI and PPI data. Wall Street generally expects the Federal Reserve to cut interest rates at least twice this year, and US stocks have risen markedly recently.
The Goldman Sachs team announced the initial target points for this year's S&P 500 index in November last year. The latest target of 5,600 points was raised for the third time since the initial target was released.
Editor/Jeffy